helping daughter buy a house

Cacran

We have offered to give my daughter a substantial amount of money to help her and her partner to get a property.
My daughter has a child. The child's father is not around. She is in a relationship (4 years) and they want to buy a house together. My daughter just works part time.
We have offered to give her half the money for the house. They will have a mortgage for the other half, which her boyfriend, who is working, will pay the mortgage repayments, although the mortgage had to be in both their names.
We want to make sure that the amount we give her is safeguarded. ie if they split or she dies, the money we gave her will either go to her or her daughter., not the boyfriend. (not that we have anything against him!)
We have had a letter from their solicitor. We have to give them ID and show them where the money comes from, whether it is a gift or a loan. They ask if we require a charge to be registered, against the house, to protect our interest.
It is looking like we may need to get legal help. I just wondered what advice we can get from this site.

Lioness_Twinkletoes

This won't work. If the money is a gift, it's a gift. If the boyfriend is paying all the mortgage, the value of the property rise by £100k rises and they split, would you be happy with your daughter only getting back what you put in, or would you think a 50/50 split would be fairer?

If you get a charge on the property then surely the money isn't a gift? Not sure the mortgage company would be happy with that.

xylophone

Has the mortgage been obtained on the basis of a gifted deposit?

You will be writing a letter to your daughter confirming that the money is an absolute and unconditional gift to her.

On that basis you and your husband can have no legal interest in the property.

The property will be registered on a tenants -in-common basis.

Your daughter has provided the 50% deposit - her partner will pay the whole of the mortgage which seems very fair.

There is no marriage so there can be no divorce ( or divorce settlement) and your grandchild's father is not her mother's current partner.

https://www.citizensadvice.org.uk/relationships/living-together-marriage-and-civil-partnership/living-together-and-marriage-legal-differences/

I am assuming that both she and her partner will take out life insurance which will ensure that the mortgage is paid off in the event of the death of either.

Your daughter will write a will leaving her share of the property to her daughter and naming a guardian and Trustee in the event that she dies while her child is still a minor.

It seems to me that that is as much as can be done?

Person_one

If they are buying as tenants in common then the assumption is that they own the property 50/50. That seems fair, as your gift is 50% of the value (her half) and he'll be paying the mortgage on the other 50% of the vale (his half).

If they split up, either they sell and get 50% each of any equity, or one can buy the other out for 50% of the equity.

I'm not sure you need to do anything to be honest, which is lucky as you can avoid any tricky relationship issues.

dimbo61

Speak to a solicitor as you maybe able to have your daughter and her partner agree to joint tenants where she has say 75% and he has 25%.
You could also consider an offset mortgage with Yorkshire building society and "friends and family "
You offset your savings against the mortgage

-taff

She can get a solictor to write a deed stating they are tenants in common and that she has put so much deposit down which is to be returned to her prior to the house proceeds being split between them [if the proceeds are to be split...]

teddysmum

Person_one wrote: »

If they are buying as tenants in common then the assumption is that they own the property 50/50. That seems fair, as your gift is 50% of the value (her half) and he'll be paying the mortgage on the other 50% of the vale (his half).

If they split up, either they sell and get 50% each of any equity, or one can buy the other out for 50% of the equity.

I'm not sure you need to do anything to be honest, which is lucky as you can avoid any tricky relationship issues.

A 50/50 split would not be fair, if they separated after, for instance, 5 years, as the amount of mortgage paid would not be half the equity in the house.

Person_one

teddysmum wrote: »

A 50/50 split would not be fair, if they separated after, for instance, 5 years, as the amount of mortgage paid would not be half the equity in the house.

You're right, I'm being stupid and should have said that the agreement would include her deposit going back to her before a 50/50 split of the remaining equity. A simple deed of trust between them will do it though, no need for any input from the parents once the money is given.

Pixie5740

So he's going to be paying the full mortgage by himself whilst supporting your daughter who only works part time and is raising someone else's child? Whilst you try and ring-fence the money your daughter will put into the house? Nice.

Have you signed, or been asked to sign something declaring this money as a gift? If so you can forget about having a charge registered as that would make it a loan and not a gift.

Sure your daughter could get a Deed of Trust drawn up saying she gets the £100k back or 50% of the equity back but I don't see why she'd be entitled to any more than that when her OH is paying the whole mortgage by himself and subsidising her part time lifestyle. As for wills your daughter can leave her share to whomever she likes just the same as he can.

Kynthia

Perhaps consider making it a loan that doesn't require repayment until the property is sold. That way the equity that is being built on the property is jointly theirs as a couple. Then if you should ever feel he is part of the family enough that you don't mind him having access to the funds, you could remove the charge.

It does need to be recognised that the situation is different from many where an unmarried couple are buying a place together and someone wants to protect some money. In this case it appears they are completely merging their finances and lives, and one will be financially supporting the other. If he's not looking to only have tge property in his name when he's the only one paying the mortgage then I don't think it's right for him to be treated any less fairly (I'm not saying you are but just to be careful and think of each option you consider as if you were his parent too to see if it's fair). However I can understand that the amount of money involved (half the property value) does make a difference.

Cakeguts

Don't do this. Let them buy their own house. It is not a good idea for one partner to have to be grateful to the other partner's parents for providing money for a house. This could ruin their relationship. Either give them the money and leave it alone or don't give them the money. I would be in favour of not giving them the money so that buying the house is their achievement. You can always give them some money as a gift afterwards as long as you give it freely without further involvement in what they can do with it.